A major Southern California energy and water utility will no longer employ a controversial consultant, following a Desert Sun investigation into possible conflicts of interest involving tens of millions of dollars in spending on solar and battery projects.

The consulting firm, ZGlobal Inc., told the Imperial Irrigation District this week it would terminate its three-year, $9-million engineering contract with IID effective Tuesday, a year ahead of schedule. IID's board of directors voted 5-0 in a closed-door meeting Tuesday to accept ZGlobal's request to end the contract, utility officials said.

ZGlobal, which is based in Northern California, has received $18 million worth of contracts from IID since 2005, most recently running the public utility's transmission and planning unit. ZGlobal has also consulted for solar developers doing business with IID, raising concerns that the engineering firm may have been "working both sides of the street" by doing work for the public utility that has benefited its private-sector clients.

IID "appreciates the work ZGlobal performed for the district at a critical time of change in the energy utility business and wishes the firm well," the utility's general counsel, Frank Oswalt, said in a statement.

An IID spokesperson didn't respond to questions about why ZGlobal ended its contract, or whether the utility had encouraged ZGlobal to do so. Eugene Iredale, a San Diego-based criminal defense attorney who told The Desert Sun last month he had been hired by ZGlobal, also didn't respond to a request for comment.

In 2013, U.S. News & World Report ranked Iredale's law firm as one of the top law firms in the country for white collar criminal defense cases involving government investigations, according to the firm's website.

Potential conflicts involve Green Light Energy

The Desert Sun identified several instances where ZGlobal did work for IID that directly affected its private-sector clients, raising questions about whether the consulting firm may have violated California law. The state's conflict-of-interest code prohibits private contractors working for public entities from using their position as a government agent to participate in the making of public contracts that could benefit them financially.

Some of those potential conflicts involve Green Light Energy Corp., a developer that has worked with ZGlobal on at least seven Imperial County solar projects. While ZGlobal founder Ziad Alaywan has said Green Light and ZGlobal are distinct entities, they share offices and representatives across more than a dozen limited liability companies, most of which are managed or owned by Alaywan. Most of those LLCs also list longtime ZGlobal employee Melissa Vaa as their registered agent in state records. Green Light's CEO is Melissa's brother Jeremy Vaa. A third sibling, Eric Vaa, also works for ZGlobal.

In March, after members of the public raised concerns about ZGlobal, the utility adopted a new conflict-of-interest policy, which says consultants working for IID can't also work for private companies looking to connect their energy projects to IID's grid. ZGlobal promised to stop working for local developers entirely. Alaywan told IID "that he's cut off his relationships with something like 17 or 18 other clients who have done or potentially do business in Imperial County," IID general counsel Frank Oswalt said in March.

A limited liability company owned by Alaywan has made more than $37,000 in payments to Imperial County related to the Valencia 1 solar project, as seen in checks recently obtained by The Desert Sun under the California Public Records Act, which have not been previously reported. Most of those checks were signed by Alaywan, and several were written after Alaywan told IID he would stop working with local energy developers. Valencia 1 was one of the Green Light solar projects that ZGlobal studied for IID.

A $2,367.75 check to Imperial County signed by Ziad Alaywan and dated Aug. 16, 2017. The check is a payment related to the Valencia 1 solar project, which was developed by Green Light Energy Corp. (Check obtained from Imperial County.)

ZGlobal advised IID to build the Midway-Bannister power line, which cost the utility $9.4 million. Midway-Bannister made possible the construction of one Green Light solar farm and one other solar farm on which ZGlobal consulted for the developer;

Power purchase contracts for Green Light solar projects were presented to IID’s board of directors for approval by an IID employee whose son worked for ZGlobal;

In October 2015, IID put five senior engineers on paid administrative leave and hired more expensive ZGlobal employees to replace them, giving ZGlobal a three-year, $9-million consulting contract for the work. ZGlobal's analysis of the senior engineers' job performance contributed to IID's decision to put them on paid leave.

It's unclear how much money IID has paid to ZGlobal so far under the three-year, $9-million contract signed in October 2015, which the consultant terminated this week. The Desert Sun recently requested copies of all checks made out to ZGlobal as part of that contract under the California Public Records Act, and is awaiting a response from IID.

HELP US INVESTIGATE: Do you have information that could lead to further reporting? Please contact the reporter at (760) 219-9679, or by email at sammy.roth@desertsun.com.

Tens of millions of dollars in canceled contracts

The Imperial Irrigation District controls the single largest share of Colorado River water. That water irrigates the farm fields of the Imperial Valley, in California's far southeastern corner. IID is also the Golden State's third-largest public power provider, selling electricity to roughly 150,000 customers in the Imperial Valley, the eastern Coachella Valley and a small portion of San Diego County. The utility is owned by its ratepayers and is supposed to provide energy and water to customers at the lowest possible cost.

IID has already taken some action in response to The Desert Sun's reporting.

Solar panels soak up the sun at the 50-megawatt Seville solar farm at Allegretti Ranch, in western Imperial County off Highway 78. Regenerate Power plans to develop two additional solar projects at the same site, including one that recently had a $75-million contract canceled by IID.(Photo11: Jay Calderon/The Desert Sun)

The utility also backed away from a deal to expand its battery facility in El Centro. IID only agreed to that $7-million contract with the developer of the original battery project, Coachella Energy Storage Partners, after Alaywan told the utility ZGlobal had stopped working for the company. But a business filing submitted by CESP to state officials in June — after IID gave the company a $7-million contract — listed a ZGlobal employee as CESP's registered agent. The business filing also said CESP's address was 750 W. Main Street in El Centro, the same address as ZGlobal's Imperial Valley office.

IID's original battery contract with Coachella Energy Storage Partners has also raised concerns about potential conflicts of interest, both because ZGlobal wrote CESP's battery proposal and because the company is led by Mike Abatti, a former IID board member. The utility gave CESP a $35-million contract to build one of the country's biggest lithium-ion batteries after throwing out cheaper bids from three companies with far more experience, saying those firms didn't have the proper contractor's license.

CESP didn't have that license either. The company said it planned to partner with another firm that had the license, Industrial Mechanical Services. But The Desert Sun determined Industrial Mechanical Services never worked on the battery's construction.

"Our investigation is on-going and I won’t be able to provide more specific information other than that we are going forward and we have no timeline as to how long this process will take," Otero said in an email Tuesday.

IID is conducting an internal investigation into the issues reported on by The Desert Sun. As part of that investigation, the utility released a report last week arguing that two IID board members didn't violate California's conflict-of-interest law when they voted to give the $35-million contract to CESP. One of those board members, Bruce Kuhn, was paid by Abatti to level land owned by Alaywan. Two adult sons of another board member, Jim Hanks, were hired to work on a solar project being developed by a ZGlobal client.

IID's internal report didn't mention ZGlobal, even though ZGlobal worked on the battery storage project and Alaywan owned the land where Kuhn and Hanks' sons did the work scrutinized by The Desert Sun. IID's outside counsel Mike Aguirre, who wrote the report, has said there will be more reports before his internal investigation is complete.

Sammy Roth writes about energy and the environment for The Desert Sun. He can be reached at sammy.roth@desertsun.com, (760) 778-4622 and @Sammy_Roth.